MUJI Is Facing A Slowdown In Business Growth In The Chinese Market

Maintaining steady growth in Japan

In China, the market is facing the risk of slowing business growth.

Japan's economic news predicts that the combined operating profit (joint business profit) of Muji's parent company's good plan in the first half of 2017 (2017 3-8) is expected to reach 21 billion yen, an increase of 6% over the previous year, reaching the highest profit in the first half of the 6 consecutive year and 180 billion yen in sales (11%).

But overseas markets, which occupy nearly 40% of Muji's overall business, are less optimistic and may even suffer a two digit decline.

In Japan, sales of groceries and clothing have been strong, which has greatly promoted its overall business.

During the period, Muji improved the management of apparel inventory and reduced some products in Japan, attracting more customers. Grocery sales also increased, especially with the use of a new formula of instant chicken, curry and other packaged foods.

The growth of passenger traffic pushed the sales of existing stores in Japan up by 12% over the same period in July, and the cost management was also optimized.

In the overseas market, China is the most important factor affecting the overseas business of Muji.

Japan's good luck program, which operates "Muji", will have a combined operating profit of 3~8 in 2017, reaching 21 billion yen, an increase of 6% over the same period. It has hit a new high of 3~8 profit for 6 consecutive years.

Japan's domestic apparel and grocery business has been strong, boosting profit growth.

On the other hand, there are also some risk factors such as the slowdown in China's business growth.

Japan's economic news analysis shows that the continuous opening of stores in China has promoted its sales increase. However, the change of exchange rate has greatly affected the profitability of MUJI products: the last fiscal year (September 2016 -2017 February), due to the depreciation of the Japanese yen, led to a rise in the number of purchases in China.

Passenger traffic also fluctuated slightly in the first half of the fiscal year. CCTV once named "Muji" food safety problem in the "3.15 evening party", which affected the shop traffic in April.

But as the most valued

MUJI's expansion in China does not seem to be slowing down.

In April this year, the good quality plan announced that in the next 4 years, there will be at least 40 new stores opening in China every year, expanding from the existing 200 stores to 360 or more. Apart from mining new opportunities in the saturation space of Shanghai and Beijing, we will also turn our attention to new large cities such as Chongqing and Suzhou.

Outside China, the target of opening up overseas markets is 640 in 4 years.

MUJI Dinner in Shanghai

In addition, Muji has also opened up the market by setting up bookstores, hotels, advanced restaurants and other experiential facilities in China.

In the second half of this year, the world's first MUJI Hotel will be opened in Shenzhen. It is expected to have 79 rooms and rooms all used.

Next year, the hotel jointly developed by Muji and Japan's Xiaotian emergency railway will also be opened at the new landmark Beijing square in Xicheng District.

The Business Insider Japan said, "China is a market as important as Japan."

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